Zug, 14.05.2024

Mass redundancies at Pfizer

Up to 74 redundancies have now been announced at the Pfizer pharmaceutical company in Zug. A further 21 people are to be transferred internally. History is thereby repeating itself: Following major acquisitions, Pfizer has always eliminated any duplication at the Zug location.

There will be mass redundancies at the headquarters of Pfizer in Zug. A spokeswoman for the US pharmaceutical and biotech company confirms that 74 redundancies are expected to be announced. Pfizer's Zug branch was only recently established following the acquisition of cancer specialist Seagen, which has been based in Zug for some time. Pfizer completed the takeover for US$ 43 billion at the end of 2023. The European headquarters of Seagen were previously located on the Dammstrasse in Zug.

"As part of the review of the integration of the activities of the two companies, we have identified synergies and duplications in certain roles and functions. The integration process may therefore have an impact on jobs," says the Pfizer spokesperson. The consultation process is currently underway. "Subject to another solution being found, the employment contracts of a maximum of 74 employees working at the Zug site would have to be terminated, provided that a further 21 employees are able to take up new positions internally," the company explains. Pfizer currently employs 191 people in Zug. This means that half of the Zug workforce will probably have to leave or transfer internally.

The Pfizer headquarters in Zug                   Photo: Dominik Wunderli

"Our colleagues are our top priority. Our main focus is on ensuring a smooth transition that respects the interests and well-being of our employees, while keeping an eye on the strategic growth of the company," the Pfizer spokeswoman continues. She emphasises that "The job cuts are not due to the performance of our colleagues. With the planned reorganisation, we are taking into account our responsibility as a company to work in an efficient and effective organisational structure that best serves the needs of our patients."

Downsizing after the mega-deal
For Pfizer, the Seagen deal is the largest acquisition since the US$ 67 billion acquisition of the Wyethpharmaceutical company in 2009, when Wyeth also had a Zug subsidiary - and in this case too, jobs were cut after the purchase. Looking back into the recent past, it should also be remembered that Pfizer took over its competitor Warner-Lambert in 2000, in one of the largest takeovers in history. Warner-Lambert was based in Baar at the time – and that deal was also followed by job cuts.

Various industry experts point out that such acquisitions are common practice for Pfizer. "It's like the car industry: you buy platforms or technologies that can be useful. Duplicate functions, for example in the areas of finance or logistics, are then usually eliminated," says one person.

Increasing pressure on pharmaceutical companies
In principle, many pharmaceutical companies do the same. The pressure is particularly high at the moment, because many companies have delays in the pipeline. In a recent analysis of the world's 20 largest pharmaceutical companies, the consulting firm Deloitte writes that the pharmaceutical industry's current business model is under considerable pressure. This is due to various ongoing regulatory changes, the impending and "unprecedented" loss of exclusivity for high-quality medicines and increased supply costs. Other challenges include rapid scientific progress, the increasing complexity of clinical trials and the rising costs of diagnoses, according to Deloitte.

Pfizer itself is facing lower growth following the large-scale vaccine sales during the pandemic. Other pharmaceutical companies such as Novartis, Roche, Sanofi and Bristol-Myers Squibb have similar concerns - all have recently announced job cuts. One industry expert says that the large pharmaceutical companies are in a good financial position. But they are struggling to grow. That's why they spend a lot of money on acquiring small, promising companies. And then save money by eliminating duplication.